Bill Lewski pays zero to walk away from $190m suit, investors get zip

Controversially forgetful businessman Bill Lewski has paid nothing to walk away from $190 million in civil claims brought against him, his fellow directors and advisers to retirement village outfit Prime Trust.

Fairfax Media can reveal the completion of one of Australia's most torrid and long-running insolvency legal actions that involved high profile Prime directors Michael Wooldridge, a former Howard Minister, and Peter Clarke, the former Vice President of the Liberal Party in Victoria and former Places Victoria head.

Mr Lewski was originally banned for 15 years in the Federal Court for breaching the Corporations Act

The settlement for all claims before the Supreme Court of Victoria is believed to be around $40 million. Not much is expected to flow to the 8000 unitholders in the trust who lost their investment. The litigation funder is thought to have received nearly half of the settlement proceeds.

Liquidators at PKF and receivers at KordaMentha to the property company had alleged that Mr Lewski was improperly granted $33 million from the company for consulting on its ASX listing and a further $60 million for the purchase of the management rights for the portfolio of villages owned by the company.

Both insolvency groups sued a slew of entities and people linked to the transactions, the $550 million collapse of the retirement village operator and its controversial deal with an arm of failed investment bank Babcock and Brown.

The proceedings also included public examinations where Mr Lewski told the court he could not recall what happened to $77 million of the money he received through Prime.

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The settlement is believed to have been paid by one of the country's largest property companies LendLease which inherited the management rights through its acquisition of Babcock and Brown Communities, investment bank Kidder Williams and its head David Williams, Melbourne lawyer firm Madgwicks and auditors Pitcher Partners.

The bulk of the settlement is believed to have forked over by law firm Madgwicks, which provided legal advice to the board of Prime Trust and had also previously been the legal adviser to Mr Lewski.

LendLease and Kidder Williams are believed to have contributed a small amount to the settlement.

Separately, the Australian Securities and Investments Commission has sought leave from the High Court to appeal the Full Court of the Federal Court’s decision to throw out its case against Mr Lewski and Prime Trust’s former directors.

Mr Lewski was originally banned for 15 years in the Federal Court for breaching the Corporations Act, while Dr Wooldridge received a 2.5 year ban and two other directors, Kim Jaques and Mark Butler, each received four year bans. All of those bans were overturned in the Full Court decision last year.

Mr Clarke is not subject to ASIC’s High Court appeal and never received a banning order unlike his co-directors.

Mr Clarke declined to comment but it is believed that like Mr Lewski he paid nothing to settle the claim.

Dr Wooldridge told Fairfax Media: “The confidential settlement does not require me to pay any sum of money to any party."

Dr Wooldridge had a separate claim against Madgwicks after he alleged, according to court documents, that the legal firm did not disclose its conflict in regards to the advice.